Lawmaker seems misinformed about college student loans

U.S. Rep. Marsha Blackburn's July 5 op-ed blaming Democrats for the doubling of student loan interest rates could not be more misinformed or misleading.

Until 1981, the federal government provided college grants and loans, the grants going to poorer students and loans to the better-off. Then the Reagan administration gutted funding for grants and funneled government-guaranteed loans to private banks, all in the name of ending government "waste" and relying more on the private sector. It was a sweet deal for banks, and Wall Street jumped all over it.

Banks offered college loans guaranteed by the government and profited by collecting fees. Then, if students defaulted on the loan, the government picked up the loss. The result was higher administrative costs; less access to college; and a fat, risk-free income stream for banks. I trust even Rep. Blackburn could not call this "free enterprise" and keep a straight face.

In 2010, the Obama administration ended the wasteful practice of subsidizing banks and returned to direct government student loans. Half of the resulting savings ($68 billion over 11 years) is going to expand Pell Grants for needier students. Rep. Blackburn likens this to Obamacare, hoping to tar the former with the latter.

I hope that she is merely misinformed about this issue as opposed to deliberately misleading. The former would be disappointing; the latter would be disturbing.

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Lawmaker seems misinformed about college student loans

U.S. Rep. Marsha Blackburn's July 5 op-ed blaming Democrats for the doubling of student loan interest rates could not be more misinformed or misleading.